1. What is Netflix’s strategy in 2018? Which of the five genericcompetitive strategies most closely fit the competitiveapproach that Netflix is taking? What type of competitive advantageis Netflix trying to achieve?

Select “yes” for those statements that are accurate andchoose “no” for those that are not.

a. Netflix plans to aggressively grow its base of subscribers inall countries where it has a presence, but most especially in thosecountries it has recently entered.

b. Invest heavily in original content as a principal means ofdifferentiating Netflix’s content library from the libraries ofrival streaming providers.

c. Provide subscribers with a large and diverse selection oftitles while increasing the subscription fees.

d. Spend aggressively on marketing and advertising to attractsubscribers, inform the public of newly available original content,and build awareness of the Netflix brand and service.

e. Use 15-day free trials to help attract new subscribers.

f. Netflix is cautious on its spending to acquire licensingrights to stream titles with high subscriber appeal.

g. Netflix is pursuing a focused differentiation strategy slowlymoving towards a broad differentiation strategy by targeting allhouseholds with high-speed internet access.

h. Netflix uses a low-cost strategy with a wider selection ofmovies.

i. Netflix pursues a best-cost strategy by delivering both a lowcost and the quality that customers are looking for.

j. Netflix’s competitive advantage comes from its wide anddiverse content library, with a rapidly growing number of originalcontent programs/titles.

k. Netflix’s title recommendation software was hard/expensiveresource capability for rivals to match, especially those withcomparatively few subscribers and/or a fast-growing contentlibrary.

l. Netflix lost its competitive advantage when it decided toincrease its monthly unlimited streaming fees.

m. Netflix will continue to use its reputation and brand namethat is well-known and well-regarded by a wide segment of thepopulation in geographic areas as a competitive advantage.

2. What does a SWOT analysis of Netflix reveal about the overallattractiveness of its situation?

Which of the following accurately characterize Netflix’sresource strengths and competitive capabilities?

Select “yes” for those strengths and capabilities below thatare accurate and choose “no” for those that are not.

a. Netflix has capitalized on having been the first-mover inexpanding its market presence to virtually all of the world’scountries where it was permitted to do business.

b. A competitive asset for Netflix is their brand namerecognition and brand power.

c. Netflix has a large, diverse content library, with arapidly-growing number of original content titles.

d. Netflix has the capabilities to produce their own in-housecontent.

e. Netflix was not a first mover but was certainty successful infollowing the strategy of other streaming providers.

f. Netflix’s proprietary recommendation software qualifies as adistinctive competence—one that provides competitive advantagecurrently and has potential for delivering sustainable competitiveadvantage.

g. Netflix has a capable top management team—Reed Hastings isexperienced in managing growth companies and has done a good job ofmaneuvering Netflix into its position as a market leader.

3. Which of the following accurately characterize Netflix’sresource weaknesses and competitive liabilities?

Select “yes” for resource weaknesses below that are accurateand choose “no” for those that are not.

a. Netflix is vulnerable to the bargaining power of moviestudios and other content suppliers to extract higher license feesfrom Netflix in return for granting rights to Netflix to streamtheir content.

b. Netflix’s service is not appealing to individuals/householdswho are content to watch regularly-scheduled network programmingand whatever cable programs are available.

c. The financial strains of producing a greater number oforiginal, in-house produced content has left Netflix financiallydrained.

d. Netflix is currently losing subscribers to Amazon due toAmazon prime membership.

4. Which of the following are attractive market opportunitiesfor Netflix?

Select “yes” for the market opportunities below that areaccurate and choose “no” for those that are not.

a. A market opportunity for Netflix includes growing itssubscriber base in recently-entered countries/geographic areas.

b. Attracting millions more subscribers—online movie rental isstill in the growth stage of the industry life cycle (as evidencedby growth in the number of new subscribers that Netflix has beenable to attract).

c. Form a partnership with smaller streaming providers such asHulu or Redbox.

d. Continue expansion into foreign markets and becoming therecognized global leader in streaming entertainment content toindividuals and households.

e. Form partnerships with movie studios in order to negotiatelicense fees.

5. Which of the following represent external threats toNetflix’s future well-being?

Select “yes” for the external threats below that areaccurate and choose “no” for those that are not.

a. External threats to Netflix include the entry of streamingcompetitors, especially those that have the name recognition, brandpower, and resources to draw subscribers away from Netflix.

b. Additional threats to Netflix include government regulationswho would prevent them from producing their own in-housecontent.

c. Growing bargaining power on the part of content providers ofall types to extract higher fees from Netflix in return forgranting Netflix the rights to stream their content.

d. Movie studios and DVD retailers lower the prices of movieDVDs, thus making it somewhat more attractive for some consumers tobuy movie DVDs rather than rent them.

e. Consumers, for any of several reasons, become less interestedin watching streamed movies or other content available fromNetflix.

f. Netflix is acquired by Amazon.